The financial guarantee process has been largely shortened for Beijing-based small and medium-sized businesses, which also enjoyed a reduced guarantee cost thanks to a recent plan released by Beijing Municipal Bureau of Financial Work, as part of the Beijing municipal government's efforts to foster a better business environment.

"Some small companies and startups have really good ideas and promising business models, but they often get rejections from banks and guarantee service providers due to lack of money or insufficient credit building," said Guo Hong, chair of Beijing Zhongguancun Bank Corp Ltd, the first privately owned bank in China that provides financial-guarantee services to small businesses and startups.

The plan, effective March 15 and dubbed "Opinions on Further Optimizing the Financial Credit Business Environment", covers 14 measures promoting innovations to the current guarantee mechanism and financial services to local residents.

The measures include encouraging capital guarantee service providers to reduce guarantee costs, shortening evaluation processes and strengthening the current credit evaluation system, thereby facilitating a smoother evaluation process.

Huang Wei, deputy general manager of Beijing Capital Guarantee & Investment Co Ltd, said his firm is cooperating with the Industrial and Commercial Bank of China to build an online credit-evaluation platform for data sharing.

Previously, applicants needed to be evaluated twice both by capital guarantee companies and banks. The platform now allows a onetime evaluation process working for both sides.

In addition to raising business efficiency, measures to reduce costs have also been carried out by many other Beijing based capital-guarantee companies.

Beijing SMEs Credits Re-guarantee Co Ltd, for example, is working on an association that has invited more than 300 IT and cultural related startups to join. The association guarantees a lower cost－limited to 2 percent of their loans －charged to its members for services from guarantee companies.

"We are taking measures to facilitate the reduction on financing guarantee cost, and meanwhile we are working on making the process quicker and easier, especially for startups and small businesses that lack sufficient financial support," said Qin Kai, chair of SMEs.

Up to now, SMEs has supported more than 59,000 small to medium-sized business, and offered guarantee service for 376 startups with a total of 422 million yuan ($67 million) in loans.

A foundation of 500 million yuan was also set up by the central government and Beijing municipal government to help small to medium-sized business pay for their loans.